The Dichotomy of the Dow

As of Friday's close, the Dow Jones Industrial Average was down 2.5% for the year to date. In 2015, it has traded in a narrow range and has been pretty much a sideways move thus far. However upon closer inspection, its individual components are acting very strangely. The bottom third of the Dow is down 9%+ for the year with 9 stocks down over 14%. With global growth slowing in China and Europe, it is no surprise that industrials, materials and energy stocks are at the bottom of the barrel. On the other hand, the top 8 performing stocks are up 9%+ with 8 stocks up double digits. Healthcare, consumer discretionary and technology sectors are holding up the boat. This is a very bizarre situation and one I can't recall ever seeing before.

Here is a closer look at the numbers. Remember that the Dow is a price weighted index so it is lucky that the best performers have been the higher priced stocks.

PRICE

PRICE

% CHG

PER SHR

COMPANY NAME

YTD

8/7/15

SECTOR

UNITEDHEALTH GROUP

21%

121.82

Health

NIKE INC 'B'

19%

114.51

CnDisc

DISNEY (WALT)

16%

109.35

CnDisc

VISA

13%

74.21

Tech

PFIZER

13%

35.19

Health

HOME DEPOT

11%

116.93

CnDisc

BOEING

10%

142.42

Indus

JPMORGAN CHASE & CO

9%

68.05

Fin

MCDONALD'S

6%

98.92

CnDisc

GOLDMAN SACHS GROUP

5%

203.44

Fin

APPLE

5%

115.52

Tech

MERCK & CO.

2%

57.97

Health

GENERAL ELECTRIC

2%

25.79

Indus

CISCO SYSTEMS

1%

28.15

Tech

MICROSOFT

1%

46.74

Tech

TRAVELERS COS (THE)

0%

105.48

Fin

VERIZON COMM

-1%

46.36

Telecm

COCA-COLA

-1%

41.77

CnStp

INT'L BUSINESS MACH

-3%

155.12

Tech

JOHNSON & JOHNSON

-6%

98.85

Health

3M COMPANY

-9%

148.89

Indus

AMERICAN EXPRESS

-14%

79.72

Fin

UNITED TECHNOLOGIES

-15%

98.29

Indus

CATERPILLAR

-16%

77.29

Indus

EXXON MOBIL

-17%

76.83

Energy

WAL-MART STORES

-17%

71.25

CnStp

PROCTER & GAMBLE

-17%

75.48

CnStp

INTEL

-20%

28.88

Tech

DU PONT E I DE NEORS

-24%

53.43

Matrls

CHEVRON

-25%

83.75

Energy

The second half of 2015: Up or Down?

The big question is: Will the Dow finish the year up or down? It is unlikely that the laggards will suddenly recover and lead the Dow higher. Energy and materials continue to face deflationary pressures and are unlikely to see a sharp rebound. That means, the Dow is highly reliant on the the consumer, tech and healthcare sectors. The fate of the Dow is in their hands. If the current leaders stumble, it will likely be a bad finish and down year for the Dow.

Do you think the market will finish higher or lower for the year? Let us know in the comments below.

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